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Why We Need Infrastructure Investment

Posted by Content Coordinator on Thursday, August 4th, 2011

U.S. CHAMBER OF COMMERCE

Written by: Bruce Josten

For the sake of near- and long-term job creation, stronger economic growth, and enhanced U.S. competitiveness, the Chamber strongly supports robust surface transportation reauthorization legislation that addresses revenue shortfalls and includes necessary and urgent policy and program reforms.

A recent Heritage Foundation blog post criticized the Chamber for its “tax and spend advocacy” and for “outright opposing measures of fiscal responsibility” in its support for transportation infrastructure investment.

Heritage must have missed the Chamber’s response to the House reauthorization proposal. To us, responsibility means being clear and transparent about the consequences of not dealing with our decaying infrastructure.

Without adequate levels of investment, the economy will shed 640,000 jobs by 2020, according to the U.S. Department of Transportation. The American Society of Civil Engineers, in a study released last week, found that inadequate investment will result in $3.1 trillion in lost economic growth, $430 billion in additional transportation costs for business, a drop in household income by more than $7,000, and a $28 billion decline in U.S. exports by 2020. The Chamber’s recent Transportation Performance Index also documents the economic consequences of not addressing transportation system performance.

It continues to surprise me that some in Washington miss the wealth of research documenting our nation’s aging infrastructure.

Responsibility also means recognizing that the Highway Trust Fund is headed toward bankruptcy and doing something to prevent that from happening. The trust fund is drying up for a number of reasons. Gasoline and user fees have remained unchanged since 1993, and a portion of the fees have been spent for non-transportation purposes (although not as much as Heritage claims, since it appears to believe that public transportation isn’t a fitting federal investment). The unanticipated economic downturn and increased vehicle efficiency that has eroded gas and diesel tax revenue have also contributed to dwindling Highway Trust Fund receipts.

Despite a large stack of reports from research entities, two Congressionally-mandated commissions, and myriad trade associations and think tanks that project the impending insolvency of the Highway Trust Fund, Congress has failed to take action—other than proposing investment cuts—to protect the fund’s solvency.

We can’t afford deficit spending. We can’t afford to increase the debt. But we also can’t afford to lock in six years of 35% cuts in highway and transit investment, as the House plan proposes. We must make the effort to try to find revenues—at least $12 billion over the next two years, as proposed by the Senate—to prevent drastic cuts. The Chamber is eager to work with Congress to identify needed resources.

Finally, responsibility means eliminating wasteful and inefficient spending to ensure that we get the biggest bang for our infrastructure buck. That is why the Chamber is solidly behind eliminating eligibility for expenditures that aren’t in the national interest, focusing dollars on core road networks and freight systems, investing in making commutes faster and more efficient, requiring performance management and accountability in state and local decision making, speeding up project delivery, expanding project financing options, creating incentives for private investment, and laying the groundwork for a sustainable revenue model that enables investment levels aligned with needs.

We have to deal with the infrastructure challenge and not just throw up our hands and walk away, assuming that someone else will pick up the slack. Some organizations and members of Congress are putting hundreds of thousands of U.S. jobs and trillions of dollars in economic growth at risk by drawing a line in the sand on the issue of revenues. To us, that is the height of irresponsibility.

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